(Yicai) April 14 -- The International Finance Forum (IFF) launched the IFF Sci-tech Finance Committee at the Wuhan Institute of Industrial Innovation and Development (WHIIID) in China's central Hubei province to foster an organic integration between tech innovation, industrial advancement, and financial development.

Jointly set up by the IFF and the WHIIID, the committee seeks to enhance the role of finance in supporting tech innovation and industrial progress, the global finance platform announced at a launch ceremony yesterday. It will take advantage of Wuhan's status as China's first science and technology finance reform and innovation zone, coordinate with the country's central region, and have a global perspective, it added.

The committee will build a high-end platform for the in-depth integration of sci-tech and finance, the IFF noted. It will also incorporate resources from the government, industry, academia, research institutions, and the financial sector, facilitate the commercial transformation of scientific and technological innovation achievements, optimize the allocation of innovation resources, support the financing and development of tech companies, and enhance Wuhan's influence and competitiveness in the international sci-tech finance field.

Sci-Tech Finance Committee to Build 'Five Major Platforms' to Achieve Development Goals

The Sci-Tech Finance Committee will focus on constructing the Strategic Dialogue Platform, the Exchange and Cooperation Platform, the Innovation Practice Platform, the Research Think Tank Platform, and the Talent Cultivation Platform to become an important platform with vast influence within three years, the IFF said.

Regarding building the Strategic Dialogue Platform, the committee will organize global high-level dialogues on sci-tech finance in line with China's strategies and the goal of turning Wuhan into a scientific and technological innovation center with national influence. It will hold an annual sci-tech finance summit to promote discussions on international issues, put forward initiatives, and expand its influence.

The Exchange and Cooperation Platform will regularly hold fintech seminars, member mutual visits, and regional inspections. It will promote the exchange of sci-tech finance talents, the connection between firms and investment institutions, and contribute to constructing the sci-tech finance reform pilot zone in Central China.

The Innovation Practice Platform will support tech companies in going global with legal, market, and partner resources, building Hong Kong and overseas regional centers, setting up international tech incubation and capital circulation platforms, and optimizing financing channels.

The Research Think Tank Platform will make an annual Global Sci-Tech Finance report, putting forward policy suggestions and industrial insights, study innovative models of sci-tech finance, exploring service systems suitable for local development, and promoting the transformation of scientific and technological innovation achievements and the promotion of global experiences.

The Talent Cultivation Platform will develop the Global Sustainable Development Leaders Program and other courses, provide customized training to cultivate sci-tech finance leaders, and promote the flow and exchange of talents across countries.

Members of the Sci-Tech Finance Committee include IFF advisor Li Dongrong, former deputy governor of the People's Bank of China; IFF vice chairman Zhou Yanli, former vice chairman of the China Insurance Regulatory Commission; IFF advisor Liu Yanhua, former vice minister of the Ministry of Science and Technology; IFF advisor Zhang Shenfeng, former vice president of the China Council for the Promotion of International Trade; IFF academic committee member Song Min, dean of Wuhan University's Institute for Central China Development; IFF academic committee member Xia Le, chief economist for Asia at Banco Bilbao Vizcaya Argentaria; and IFF academic committee member Huang Jing, former director of the China 21st Century Agenda Management Center.

These distinguished members will jointly discuss the strategic goal of how finance can better serve scientific and technological innovation, focus on the innovative practices of Wuhan's sci-tech finance reform pilot zone, and offer suggestions for the development direction of the Sci-Tech Finance Committee and its work plan for next year.

Wuhan Commits to Developing Sci-Tech Finance

Wuhan will use equity investment as a guide, debt financing for credit enhancement, and the capital market for cultivation, Mayor Sheng Yuechun said at the opening ceremony regarding the city's sci-tech and industrial innovation situation. The government will allocate CNY50 billion (USD6.9 billion) to establish funds to drive social investment and form a fund matrix of CNY300 billion to CNY500 billion (USD41.1 billion to USD68.6 billion), Shang added.

Wuhan's government will deepen the direct investment pilot by financial asset investment companies to build a new development pattern, Shang noted.

Sci-tech finance is an important business area for finance to serve the real economy, a key link in promoting the virtuous cycle of the technology industry, and a vital part of China's efforts to build a financial powerhouse and support the construction of a national innovation system, said IFF advisor Li Dongrong, former deputy governor of the PBOC.

Wuhan aims to build a national sci-tech finance center and continuously deepen the integrated innovation of sci-tech and finance, Li noted, adding that accelerating the theoretical and practical exploration of sci-tech finance in the city is of great practical significance.

Although China's sci-tech finance development policies and measures are constantly improving, and the sci-tech finance services system is continuously being refined, it remains necessary to build and improve a sci-tech finance ecosystem compatible with relevant innovation, Li pointed out.

Bank credit will remain an important channel to support sci-tech innovation in the near future, with the application of insurance tools needing to be emphasized and more long-term capital and patient capital to be introduced, Li added.

Roundtable Explores Opportunities, Challenges

The Sci-tech Finance Committee held a roundtable conference themed "High-Quality Development of Sci-Tech Finance: Opportunities and Challenges," moderated by IFF academic committee member Xia Le, chief Asia economist at BBVA.

Panelists included IFF advisory committee member Zhang Shenfeng, ex-vice chairman of the China Council for the Promotion of International Trade; IFF academic committee member Zhou Daoxu, director of the Research Center for Finance Security at Tsinghua University's PBC School of Finance; IFF academic committee member Huang Jing, former director general of the Administrative Center for China's Agenda 21; and Liu Bo, a member of the Party Committee and VP of Shenzhen Innovation Capital Investment.

The roundtable conference discussed issues such as how to cultivate patient capital, with Zhou believing that the essence of the problem is the contradiction between the short-term profit-seeking nature of social capital and the long-cycle research and development of hard technology.

It is necessary to start from three aspects to solve the issue, according to Zhou. First, policy tools should shift from direct to indirect, such as changing from directly providing funds to providing R&D subsidies and using the intellectual property rights of tech firms for financing. Second, a mechanism for sharing risks among the government, financial institutions, and companies should be set up. Third, a culture of patience, a culture that tolerates failure, and the investment model of the Singaporean government should be fostered to introduce long-term capital.

The capital market should be used effectively, Zhang noted, pointing out that offshore capital markets, such as Hong Kong, are important financing channels. Investment funds, especially private equity, should be widely attracted, Zhang added.

The Chinese government should focus on basic research, but local governments at all levels should still provide flexible support, said Huang regarding allocating resources to different companies when promoting innovation, adding that the market should determine resource allocation.

Government funds should guide, not take on the main investment role, Liu pointed out. The government should support industries and markets, such as connecting scientific and technological innovation resources with large companies, and offer preferential policies to attract talent rather than just providing funds, Liu added.

The conference also discussed the phenomenon of the withdrawal of US dollar Private Equity & Venture Capital funds from the Chinese market.

Chinese PE/VC funds can fill this gap, according to Liu, with Zhang agreeing and adding that there may be some impact on certain projects in the short term, but it will not have a major impact.

Established in June 2021 by the Wuhan government, the WHIIID began operating in April 2022 as a new-type R&D institution. It focuses on tech system reform, VC, tech incubation, talent attraction and aggregation, and intellectual property and productive services, aiming to become a first-class, world-renowned R&D organization within the next decade.

The IFF, a non-profit, non-governmental, independent organization, was set up by the Group of 20 members and international organizations, including the United Nations, the World Bank, and the International Monetary Fund, in October 2003. It is a top permanent institution for dialogue and multilateral cooperation in global finance.

Editor: Martin Kadiev